* China lifts lenders' reserve rates requirement
* February Brent nears expiry, March contract priced lower
* Coming Up: U.S. retail sales, industrial output
(Adds quotes, updates prices, previous SINGAPORE)
By Zaida Espana
LONDON, Jan 14 (Reuters) - Oil weakened on Friday after
China lifted lenders' reserve rate requirements by 50 basis
points from February to temper inflation.
China's move is the seventh increase since early 2010, and
fanned expectation that Beijing's appetite for buying
commodities, and oil, could lessen. []
U.S. crude oil futures fell by $1.10 to $90.30 a barrel by
1043 GMT.
February's Brent crude contract <LCOc1> was flat at $98.06 a
barrel, before expiring at the end of trading on Friday. The
March contract <LCOc2>, which will become the front month on
Monday, shed 16 cents to $97.13 a barrel.
"It was widely expected (China) would try to tighten the
monetary base further," Commerzbank's Eugen Weinberg said. "It's
not actually surprising that they are trying to take steam out
of the economy."
"The market was pricing in the perfect world, and (...)
although not unexpected this might change sentiment and provoke
profit-taking," he said.
The discount for U.S. crude futures against Brent stood at
$7.74 by 1042 GMT, after widening to $7.81 on Thursday, the
widest discount since February 2009.
The dislocation between the two was further exacerbated this
week by production snags from Norway to Alaska, reinforcing the
view that a tightening of global oil markets could benefit
waterborne Brent crude over the U.S. futures marker WTI, a grade
delivered at the landlocked storage hub of Cushing, Oklahoma.
Alaska's main oil pipeline moved closer to restoring oil
shipments to full volumes on Friday.
The line, which was closed after a leak last week, choked
crude flow to about half of normal levels of 320,000 barrels per
day on Thursday. []
"Supply concerns have played a key role in oil's ascent from
the $80 a barrel level but are showing signs of abating as of
late," Gain Capital Forex.com senior market strategist Daniel
Hwang said in a note late on Thursday.
The pipepline closure lent support to Brent crude prices
this week, lifting prices $1 shy off the $100 mark.
"The shutdown in the Trans Alaska Pipeline, a major
distributor to the West Coast, seems to be resolved and is
likely to allay fears of any long term supply disruptions,"
Hwang said.
Investors will also eye a flurry of data from the world's
largest oil consumer, the United States, which will issue
readings of the consumer price index, December retail sales and
the Reuters/University of Michigan sentiment.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by William Hardy)
